The epsilon-globin gene is the first of the beta-like globin genes to be expressed during human development. Maximal epsilon-globin synthesis occurs in the large nucleated erythroid cells of the embryonic yolk sac. Transcription of the gene gradually ceases between the 6th and 10th weeks of fetal life, as the site of erythropoiesis shifts to the fetal liver. To investigate the regulation of this gene we have mapped, in vitro, the sites of interaction between nuclear proteins from erythroid and non-erythroid cells, and DNA sequences in the epsilon-globin promoter. We identified a site for the erythroid factor GATA-1 at position - 165 in the epsilon- globin promoter. GATA-1 binding at this site is required to mediate the effect of the human beta-globin LCR HS II enhancer. However, in the absence of the enhancer GATA-1 does not participate in transcription from this promoter. GATA-1 sites in the enhancer could not replace the requirement for, nor did they interact with, the promoter site. The enhancer depended instead upon AP-1/NF-E2 sites in order to effect enhancement from this promoter. Thus, productive promoter-enhancer interactions increasing transcription of the epsilon-globin gene may require as few as two proteins interacting through two regulatory sites in the DNA. The beta-globin LCR exhibits at least two kinds of properties: it has long range effects on chromatin structure, as well as classical enhancer activity. We have designed a minichromosomal vector containing a marked epsilon-globin gene, in order to study the effect of LCR sequences on the structure of the epsilon-globin gene in chromatin. The minichromosomes are carried as stable episomal elements, assembled into chromatin, in erythroid and non-erythroid human cells. In the absence of the LCR, we found that the epsilon-globin gene on the minichromosome was not transcribed. The gene may require its own enhancer to be expressed, even in an erythroid environment, suggesting that the availability of erythroid transcription factors is insufficient to allow expression. The minichromosome system may provide a means to study the effects of the LCR on chromatin structure, as well as its enhancer activity.